December 10, 2020

How to make money with ethereum: The Guide 2020

How to make money with ethereum: The Guide 2020

Ethereum is the second popular cryptocurrency after Bitcoin. This is a full application platform that allows decentralized apps. One of the examples of it is the Cryptokitty. This is a game based on blockchain transactions. Usually, though, users want to use Ethereum for creating their own altcoins and use it as a payment method.

What is Ethereum?

Ethereum is a full-functioning blockchain platform that is more than just currency. This is a platform where users can create decentralized apps with a 100% level of transparency. Not a single transaction can occur without confirmation from the blockchain system. This fact guarantees a high level of protection.
As The New York Times said, Ethereum can be compared to a huge computer with a lot of people connected to it.

One of the most interesting features of Ethereum blockchain and difference from Bitcoin is the possibility to get investments without any intermediaries. You create an offer and wait for the amount of money desired. If the necessary level of investments were reached, the money would be saved on the account. If the necessary level of investments weren’t reached, the money would be returned to the owners. This fact totally excludes any possibilities to steal investments. The system won’t allow this operation if some dishonest actions are carried out.

There are some more differences between Bitcoin and Ethereum. Let’s consider them in more detail to get a greater picture about features of cryptocurrencies:

  1. The time of block creation. You need to spend about 10 minutes to get one block in the Bitcoin blockchain. The time needed to create one Ethereum block is 12 minutes. It can make transactions significantly faster because of the higher speed of confirmation. The disadvantage of this approach is the bigger number of blocks in queues.
  2. The amount of money on the market at the current time. Almost all Bitcoins have been mined, and now you have a little number of possibilities to create new Bitcoins. The number of Ethereum coins is significantly smaller, and they were pre-mined. That’s why you have more chances to earn money mining Ethereum than Bitcoin.
  3. The amount of reward and the algorithm of getting the reward. If we talk about Bitcoin, mining becomes two times less profitable every 4 years. Now, the amount of reward is 12,5 Bitcoins for one block. Ethereum gives 5 ETH for every block. Also, the special algorithm in the Ethereum network stimulates personal mining and demotivates users of ASICs to mine this coin using these devices.

To sum up, there are a lot of differences between Bitcoin and Ethereum blockchains. Bitcoin is more stable and protected. Yet, you should understand that the goals for Bitcoin and Ethereum are also different. Bitcoin is a digital currency and is used only for this goal. Ethereum is an environment for creating decentralized apps. Ethereum is significantly easier to mine in comparison to Bitcoin. Let’s consider the ways to earn money mining Ethereum.

What do you need to know to mine Ethereum?

Ethereum is originally a crypto that can be mined with something other than a graphic card. Everyone who wanted could mine on the CPUs, but now this time is over. The new reality is the following: you haven’t been able to mine using the CPU for 4 years. This is a totally unprofitable decision because the ETH ASICs started appearing in 2018. These are common all over the world.

However, GPU mining is still possible. You need to understand these things to use GPU for mining:

  1. How much is it? Will the invested money be returned?
  2. How powerful is the device?
  3. What is the hashrate in total?
  4. How stable is this equipment?

Also, you need to look at the amount of GPU memory. If it is less than 8 GB, this isn’t enough now because 4 GB GPUs aren’t going to be supported at the start of 2021. Yes, not every graphic card can be used.

Solo mining

A lot of beginners want to mine cryptocurrency in the solo mode. Unfortunately, forecasts for this method of mining are very pessimistic. Even if you have 10 powerful ASICs, you won’t be able to generate one block faster than in 50 days. If you are an average user with a standard equipment, you need up to 80 days to mine one block. The 12 seconds time of block generation is only for the network in general. That’s why your chances to mine cryptocurrency are higher if you use pools.

If you want to mine autonomously, you’d better mine a simpler cryptocurrency and exchange it to Ethereum. For example, you need much less time to mine CLO cryptocurrency, and you can exchange it and wait for the moment when you can sell Ethereum and other altcoins at the best price.

You need to look into the future. The simple calculations can make your effectiveness much higher.

Finding the pool

You’d better mine cryptocurrency in special places named pools. This is a centralized internet place to which all equipment of members is connected. This network mines the cryptocurrency and the income is divided between all members according to their part in this process. To make it more understandable, the part of the hashrate of the certain person in the general hashrate affects the amount of money they can get.

You need to look at these criteria before you use the services of the pool:

  1. How much time it works.
  2. Number of positive reviews.
  3. Total hashrate of the pool. The bigger hashrate, the better pool is.
  4. Total number of miners.
  5. Minimal amount of money you need to earn to withdraw.

The steps you need to take to mine

Mining is a simple process, but you need to follow these steps if you want to get some Ethereum coins:

  1. Choose a graphic card
  2. Create a farm for mining
  3. Choose a pool
  4. Register a wallet. MyEtherWallet is the most popular wallet for Ethereum. Also, you can use other different wallets, such as exchanges, but they aren’t so profitable.
  5. Set the miner application up
  6. Start mining.

Ethereum mining is much more effective and profitable at this moment.